Importance of Business Intelligence in Today’s World

Business Intelligence (BI) describes technologies, applications, strategies & practices that are used to
collect, analyze, and integrate other pertinent information to allow businesses to take informed and
strategic decisions related to them. Businesses can leverage critical information and extract meaningful
insights from old and current data. This is made possible by the use of business intelligence tools, which
process big data sets from various sources and deliver the results and insights in visual forms that are easy
to understand and take action on.

Let’s illustrate departmental-specific examples regarding the use of BI:

1. Human resources– The HR department can reap benefits from BI implementation by utilizing
productivity analysis, compensation, payroll tracking & other insights into employees.
2. Finance– BI can provide valuable and in-depth insights into financial data. It can help track
budgets, identify potential financial problems, and help improve the overall organizational
business health and financial stability.
3. Sales– By predicting sales cycles and analyzing the conversion rates and income, BI can help
increase sales. It can show what works for the company and what does not which can help in
enhancing sales performance.
It keeps track of the customer data and provides a better understanding of their interaction with
the company. Such analysis can help resolve customer issues and also leverage sales with
tailored messages.
4. Marketing– BI solutions can help marketing teams to develop better campaigns that can
generate higher ROI by providing analytics on current and previous campaigns. It can also
provide metrics like customer acquisition cost (CAC), cost per lead (CPL), along with
campaign click-through rates (CTR) which are essential for successful marketing campaigns.
Some of the tools and software used for Business Intelligence are

 Spreadsheets- Microsoft Excel and Google Docs are some of the most widely used BI tools.

 Reporting software- It’s used to report, organize, filter and display data.

 Visualization software- Data visualization software translates and transforms data into visual
graphical representation for easier and simpler interpretation.
 Data mining tools- These tools dig into big data and data streams to find patterns and trends using
artificial intelligence, machine learning and statistics.
 Online analytical processing (OLAP)- These tools are used to analyze datasets.
Let’s take a look at some of the advantages of business intelligence and the importance of BI in
organizations;
1. Enhanced decision-making capabilities: Today, companies track and analyze KPIs and
business metrics from several data feeds. BI helps in accelerating and improving business
decisions by giving a very comprehensive view of the business data and by generating visual
insights offering a better and enhanced understanding of the data available.
BI helps in monitoring performance at a peak level and can return results in a visual format
facilitating better understanding for decision making. It highlights business trends and can
identify potential KPIs to be tracked.
2. Better organizational efficiency: Efficiency often gets negatively impacted when the data is
manually analyzed to create reports. With numerous data sources in various formats, the
probability of error increases along with lag in reporting, resulting in impacting the decision-
making process.
Using BI, the data is sorted, processed, and analyzed and visual reports are generated faster
giving better insights for taking decisions and generally increasing efficiency.
3. Productivity: Using business intelligence companies can reduce or eliminate bottlenecks, daily
tasks can be automated, business processes can be refined & generally have better organization.
Since data is processed centrally, the management is in a position to take decisions based on it
and can direct teams for increasing productivity.
4. Reporting: Companies can use BI to track KPIs for sales, operations, and finance by using
customized reports generated from various data streams. Accurate reports including visual
reports are generated in real-time using various data streams and companies can utilize these
reports to make faster decisions. Interactive real-time reports give more detailed blow-by-blow
accounts while variables can be added or removed to gain better insight.
5. Identifying trends and patterns: One of the benefits of business intelligence is that it can be
used to make informed decisions that are based on hard data analytics. Technologies using data
analytics help companies spot trends and patterns that ultimately help optimization of resources
and processes.
6. Sales and marketing: Customer retention and the development of new customers is the goal of
any business. Using BI and tracking the trends and patterns, sales and marketing teams can get
a detailed analysis of customer profiles who make significant regular purchases and which kind
of profiles can be targeted for increasing sales. BI can help sales and marketing teams track and
evaluate promotional activities and also determine which campaigns work well. Such reporting
helps companies make decisions on budget allocation, and plan sales pitches and campaigns to
achieve higher sales and increase revenue.
7. Upgraded customer experience: Organizations using business intelligence can better
understand and give enhanced services to their customers from data collected from different
sources like user behavior, purchase history, customer surveys, chat histories etc. Insights given
by visual representation can help an organization provide better service and upgrade the
customer experience.
8. Performance and revenue: Companies focus on increasing their performance to generate
higher revenue. Using business intelligence to further this goal gives an organization the tool to
generate more revenue through performance. BI gives critical insights into customer behavior
which helps in determining marketing strategy for increasing sales. It also helps in identifying
opportunities. Since BI collates different data streams and reduces data redundancy, reducing
costly inefficiencies, and increasing productivity. This translates into optimizing profits.
9. Removing guesswork: Earlier companies did not have access to complete data and collating
data sometimes led to human error and resulted in some guesswork or approximation for
 making decisions. BI has eliminated all this by collating the big data in a centralized way and
generating reports that help eliminate the guesswork or approximation for decision making and
increase the competitive advantage.
The adoption and use of BI have increased significantly due to the Covid-19 pandemic as more and more
companies resort to remote work and accessing data remotely is the key to making informed decisions.
The benefits of using business intelligence make it an important tool for businesses today and in the
future.

Business Intelligence in Finance

Business Intelligence (BI) in finance uses BI techniques and tools to support financial analysis and
decision-making. This includes budgeting, forecasting, financial reporting, and performance
monitoring.

Business Intelligence (BI) is an essential tool for finance teams to make data-driven decisions and
optimize financial performance. BI can be used to monitor financial performance, create budgets and
forecasts, generate financial reports, ensure compliance with financial regulations, and manage risk.
It provides accurate, timely, and relevant information that can be used to identify cost savings and new
revenue streams and improve financial performance. By using BI, finance teams can make more
informed decisions, increase efficiency, and improve transparency and collaboration with other
departments.

In finance, BI is often used to:

1. Monitor Financial Performance
Monitoring financial performance refers to the process of using Business Intelligence (BI) techniques
and tools to track and analyze financial metrics, such as revenue, expenses, and profitability. This is an
important aspect of using BI in finance. It can help finance teams identify areas where cost savings can
be made and new revenue streams can be generated. Example of how BI can be used to monitor
financial performance:
 Dashboards: Interactive dashboards that show financial indicators like sales, expenses, and
profitability can be made using business intelligence (BI). Finance teams and other stakeholders
like management and investors can use these dashboards to track financial performance in real
time.
 Financial reports: Business intelligence (BI) can be used to create financial reports that give
specific details on financial performance. These reports can be used to analyze trends and patterns
in financial data and to track changes in financial performance over time.
 Budget vs Actual analysis: Analysis of discrepancies between budgeted and actual financial
performance using business intelligence (BI) can assist finance departments in identifying
differences and implementing corrective measures.
2. Budgeting and Forecasting
Budgeting and forecasting refer to the process of using Business Intelligence (BI) techniques and tools
to predict future financial performance. This is an important aspect of using BI in finance. It can help
finance teams create accurate budgets and forecasts, which are important for strategic planning and
decision-making. An example of how BI can be used for budgeting and forecasting:
 Historical data analysis: Analysis of historical financial data, including sales, expenses, and
profitability, is possible using business intelligence (BI). Using this information, one can forecast
future financial performance and spot trends and patterns in past financial performance.
 Forecasting models: BI can be used to develop forecasting models that project future financial
performance based on previous data and statistical techniques. These models can account for
variables, including market trends, economic situations, and company-specific information.
 Budget and forecast comparison: Comparing actual financial performance to planned and
predicted data using business intelligence (BI) can help finance teams spot discrepancies and take
necessary action.
3. Understanding Customers
Understanding customers is an important aspect of using Business Intelligence (BI) in finance. This
refers to the process of using BI techniques and tools to gain insights into customer behavior and
preferences to make informed decisions about financial matters such as pricing, marketing, and product
development. Some examples of how BI can be used to understand customers include:
 Customer Segmentation : By analyzing customer data, BI can divide clients into several categories
according to their demographics, purchasing patterns, or other factors. To make appropriate
financial decisions, finance teams might use this information to identify important client categories.
 Analysis of Consumer Behavior : BI can be used to examine consumer data and spot trends in
consumer behavior. Finance teams can use this information to better understand how customers use
their goods and services and make decisions about enhancing the customer experience.
 Predictive modeling: By analyzing customer data, BI may be utilized to develop models that
forecast future customer behavior. Finance teams can use this information to determine possible
client trends and decide how to modify their financial strategies.

4. Financial Reporting

Financial reporting refers to the process of using Business Intelligence (BI) techniques and tools to
generate reports that provide insight into financial performance and trends. This is an important aspect
of using BI in finance, as it can provide finance teams and other stakeholders such as management and
investors with greater visibility into financial performance and trends. An example of how BI can be
used for financial reporting:
 Financial statements: Financial statements, such as income statements, balance sheets, and cash
flow statements, can be produced using business intelligence (BI). These reports give a thorough
picture of financial performance and can be used to monitor it over time.
 Customized reports: BI can provide details about a company’s financial performance. The
demands of various stakeholders, like management, investors, or regulatory agencies, might be
catered to in these reports.
 Report Automation: Financial report generation can be automated using BI, which can eliminate
errors and save time.
 Data visualization : BI can produce data visuals, such as pie charts, bar graphs, and line graphs,
that aid in making financial data more understandable and useful.
5. Compliance
Compliance refers to the process of ensuring that an organization adheres to laws, regulations,
standards, and guidelines that are relevant to its operations. In finance, compliance can refer to ensuring
that an organization’s financial practices and reporting comply with relevant laws, regulations, and
standards. Business Intelligence (BI) can be used to support compliance by providing organizations
with the necessary tools to monitor and report on financial performance such as:
 Regulatory reporting: Reports required by regulatory agencies including the SEC, FDA, and IRS
can be produced using business intelligence (BI). These reports offer thorough data on financial
performance and can be used to verify adherence to accounting rules.
 Audit trails: Audit trails can be beneficial in the event of an audit since they trace changes made to
financial data and can be created using business intelligence (BI).
 Monitoring for compliance: BI can be used to build automated systems that can spot and warn
businesses of potential compliance problems. This enables organizations to act appropriately before
a violation happens.
 Reporting on compliance: BI can be used to create compliance reports that give specific
information about compliance status and any steps to address compliance issues.

6. Risk Management

Risk management refers to the process of identifying, assessing, and mitigating potential risks that may
affect an organization’s financial performance. Business Intelligence (BI) can support risk management
by providing organizations with the necessary tools to identify and evaluate potential risks and monitor
the effectiveness of risk management strategies. An example of how BI can be used for risk
management:
 Risk identification : BI can be used to analyze financial data and identify potential risks such as
credit, market, and operational risks. This can help organizations proactively identify and address
potential risks.
 Risk assessment: BI can be used to evaluate the likelihood and potential impact of identified risks.
This can help organizations prioritize which risks to address first.
 Risk reporting: BI can generate reports that provide detailed information about the status of risks
and the effectiveness of risk management strategies. These reports can communicate risk
management efforts to stakeholders such as management and investors.
Advantages of using Business Intelligence in Finance
1. Improved financial performance: By providing finance teams with accurate and up-to-date
information about financial performance, BI can help them identify areas where cost savings can be
made, and new revenue streams can be generated.
2. Better decision-making: BI can give finance teams the information they need to make informed
decisions about budgeting, forecasting, and other financial matters.
3. Greater efficiency: BI can automate many manual financial processes, such as data collection and
analysis. This can save time and reduce errors.
4. Better compliance: BI can help organizations comply with financial regulations by providing them
with the necessary tools to monitor and report on financial performance.
5. Better risk management: BI can help organizations identify and evaluate potential risks and
monitor the effectiveness of risk management strategies.
6. Increased transparency: BI can provide finance teams and other stakeholders such as
management and investors with greater visibility into financial performance and trends.
7. Better forecasting: BI can help finance teams create more accurate budgets and forecasts by
providing them with historical data and trends on, to base their predictions.

Business intelligence in CRM

BI in CRM can play an important part in helping the business to attract and retain their customers, as
customer service and customer satisfaction are the backbone of customer relationships. In effort to ensure
customer satisfaction and retention, business spend a lot time trying to understand buying behavior,
customer expectations for product support, website support and service variety (service offerings).
BI in CRM is crucial to business success. Competitors have already embraced metrics and KPI (key
performance indicator) for customer relationship management to provide objective metrics and
understand what tasks and activities support goals, and where the business needs to refocus.
CRM is a business strategy that identifies the customer as a very important business asset. It recognizes
that customers are unique and need to be treated as uniquely as possible. It recognizes customer
satisfaction as important only as a determinant of managing churn and future revenue potential,
Information is critical in such a strategy and can only come about through the analysis of data. Smart use
and analysis of data makes business intelligence. So, business intelligence is a broad category which
includes many uses of data, one of which is in pursuit of a CRM strategy.

Key notes:
Once the CRM application is aligned with BI, it becomes part of the business strategy. Every report has
intelligence embedded within provided the input data is clean and appropriately consolidated. If the CRM
application data is not optimized to the level required by the BI system it could pose a problem, as the
business comes to believe that the BI system is not effective.
 To avoid such scenario and uncompromising procedures to consolidate the multiple databases in the
CRM application :

Initiating better data practices in the organization beginning with the process of data collection.
Many organizations present a multi-page data form for new customers to fill up, and this is invariably
incorrectly or partially completed due to the tedium involved. Instead, data could be gradually collected
over a period of time using innovative means. For instance, call center personnel could call to check if the
customer is happy with the services provided, and simultaneously procure additional information every
two to three months.

Analytics for customer relationship manager:

It helps to identify the problems affecting customer service, and allows one to understand delays in
delivery, response time for information requests, the number and nature of complaints and claims and
numerous other factors.
A BI tool for customer relationship management set priorities to serve key customers and to understand
buying behaviour and customer satisfaction for various market segments, client profiles, products and
services. Team members can use consistent goals and expectations to satisfy service expectations and be
accountable for established objectives. Where results are declining or customer satisfaction is poor, the
organization can quickly assess the root cause of the problem and adapt processes, training, policies and
procedures to ensure that critical business initiatives are not put at risk.

How CRM and BI are driving modern marketing?

1. Pricing consideration: Big data helps you to do away with out-date practices. Exploiting the loads of
data available from customer interactions enables companies to price a product correctly. BI can help
manage dynamic pricing to improve revenue generation, with the use of real-time inventory and
supplier data and correlate it with financial forecasts and customer behaviour analysis
2. Decision making: With CRM data, BI can help unlock various trends around marketing. You get to
serve your customers based on their personas, buying behavior, and industry influence. This way you
can engage better with them and influence their opinions in favor of your brand.
3. Effective customer care: With the huge volume of data available with your organization, you can
personalize your marketing messages and outreach programs for maximum potential of success. With
BI, you can craft multi-channel marketing techniques. This in turn increase customer engagement
prompts up-sell/cross-sell, and improves customer retention.
How CRM can use BI?

1. Better data = better BI: Once the CRM application is synced with a BI solution, you can extract
gold-level insights to aid your decision making. If the input CRM data is clean and appropriately
consolidated, you will be able to generate intelligent and useful data. The reverse is also true. Hence,
CRM data that is maintained diligently can lead to better BI and actionable insights. This can be
achieved by incorporating rigorous processes to consolidate the multiple databases in the CRM
application.
2. Evaluate what you need: The next step is to describe where you are, on the CRM-BI planning and
deployment metric. Focus on what supports your business and what impacts your customers. You
need not be overwhelmed by fancy BI and analytics technologies if they don't suit your business
objectives. Take for example, predictive analytics. With CRM data you can add a lot of value to
behavioural intelligence and come up with personalized marketing tactics to improve cross-sell and
upsell of products
3. Plan and grow: CRM and BI system integration needs to be well-thought of in order to work
seamlessly and deliver expected outcomes. You may have constraints of budgets or time, but no
rushed implementation can yield the results you are expecting. Hence the integration needs to be a
well-planned affair.

Business intelligence in CRM has been a huge win - win situation for both the business as well as for the
customers by providing benefits listed below:
 Centralize and share resources, develop strategies and align communications
 No manual data entry needed
 See what needs to be done next
 Track budgets, costs and profits in real-time.
 Smooth and trouble-free implementation methodology
 Share immediate project data, tracking progress
 Empower users with a flexible, intuitive interface that fits their way of working.